New research shows foreign investors snapped up the majority of London office space last year. Overseas maiden investments accounted for a third of the total spend in the London office market in the last 12 months.
Foreign first-time buyers and investors are dominating the London office market according to new research from the property group Knight Frank.
The figures show that foreign investors and cash-rich first time investors are fighting for a share of the market as they look to acquire stable assets in the current Eurozone crisis. According to Knight Frank, overseas investors making their debut investment in the London office market accounted for about a third of the £9.1 billion spent in the market last year, while foreign investors accounted for about 60% of the overall investment into the market.
The announcement backs up last year’s figures which show that the majority of property in the City of London is now owned by foreign investors and institutions.
Commenting on the figures, City investment partner at Knight Frank Stephen Cliffton said the majority of the interest has come from countries including Malaysia, South Korea, Russia and Hong Kong.
Significant purchases made in the London office market last year included Permodalan Nasional Berhad’s purchase of a 460,000 sq ft office complex in the City for £350 million and the purchase of the Aviva Tower for £280 million by a group of wealthy south-east Asian individuals.
Despite the current financial crisis, interest from foreign buyers seems to be continuing. This year has already seen the debut purchase of a block opposite the Bank of England for £70 million by Korea Investment Corp.
Commenting on the current foreign demand, director of capital markets at Jones Lang LaSalle James Beckham said: “A lot of these investors have surplus cash flow and are looking all over the world for places to reinvest. Other institutional investors are searching for assets that match their long-term liabilities.”